‘TICRC OFFICE USE ONLY TROF #2592 PERFORMANCE AGREEMENT This Performance Agreement (the “Agreement”) is made and entered into this 23" day of August, 2012, by and among the Virginia Tobacco Indemnification and Community Revitalization Commission (the “Commission"), a political subdivision of the Commonwealth, the City of Danville, Virginia (the "Grantee"), a political subdivision of the Commonwealth, and Norhurst, Inc. (the "Company"), a Delaware corporation whose Federal Employer Identification Number is 202207 PF. WITNESSETH: WHEREAS the Grantee has been selected to receive a grant in the amount of $625,000 (the “Grant”) from the Commission for its use in inducing the Company to make capital investments and employ persons in the City of Danville (the “Locality”); WHEREAS the Grantee has indicated its desire to tender the Grant to the Company for its use and benefit, provided that the Company commits to th relating to employment and capital investment as described herein; achievement of certain goals WHEREAS the Commission, the Grantee and the Company desire to set forth their understanding and agreement as to the use of the Grant, the obligations of each party hereto, the conditions under which the Grant must be repaid, and the obligations of each patty hereto in the event of default; WHEREAS the Commission finds that the Grant serves a valid public purpose and is consistent with the Commission's mission as outlined in Section 3.2-3100, et. seq, of the Code of Virginia. NOW, THEREFORE, in consideration of the foregoing, the mutual benefits and promises of the parties to this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby covenant and agree as follows: Section 1. Disbursement of the Grant The Commission shall disburse the Grant to the Grantee within 30 days of the Commission’s receipt of (i) this Agreement, executed by all parties thereto, and (ii) a written request for disbursement from the Grantee, PROVIDED that the Grantee is not in default on its obligations to the Commission as of the date first written above. In the event that the Grantee is in default on its obligations to the Commission as of the date first written above, disbursement of the Grant shall be withheld until such default is cured.If disbursement to the Grantee has not occurred within one hundred twenty (120) days from the date of this Agreement, the Grant shall be automatically rescinded. Unless otherwise agreed in writing by the parties hereto, Grantee shall disburse the Grant to the Company, or for the Company’s benefit, within 30 days of receipt of the Grant from the Commission or return the money to the Commission. Section 2. Use of the Grant Under this Agreement, the Commission places no restriction on the use of the Grant proceeds by the Company. Should there be any such restrictions imposed by the Grantee, the same shall be described in an Exhibit A and attached hereto, which shall be binding upon the Company only if signed thereon by an authorized Company representative, and not by reference herein, The Grantee shall be responsible for enforcement of any restrictions described in said Exhibit A. Section 3. Employment Obligation ‘The Company shall employ at least 108 persons in the Locality with a quarterly aggregate payroll of at least $1,798,200, Said employment and payroll will be in addition to those already employed in the Locality by the Company and paid during the calendar quarter ending on June 30, 2012, hereinafter called the “Base Period”. Persons employed by the Company in the Locality shall be counted as employment hereunder only to the extent that they (a) exceed the aggregate number of employees at all Company locations within the Commonwealth of Virginia during the Base Period, and (b) are not counted as fulfillment of any other employment obligation made to the Commission by the Company under any other agreement. Section 4. Capital Investment Obligation The Company shall make capital investments in the Locality of at least $2,200,000 in assets subject fo local tax levy, notwithstanding the local taxing authority’s election, if any, to waive or refund the taxes so levied. Said investments will be in addition to (a) those already made as of the end of Base Period, and (b) those counted in fulfillment of any other capital investment obligation made to the Commission by the Company under any other agreement. If the Company is exempt from the payment of property taxes on certain assets by state law, the Company shall not be entitled to receive or keep any portion of the Grant allocated to capital investment in those certain assets. Section S. Determination of Performance - Employment To cain the Grant, the Company must meet its employment obligations hereunder not, later than thirty six (36) months after the end of the Base Period. The Company’s employment obligation will be deemed to have been fully met when it can document any eight (8) consecutive calendar quarters after the Base Period in which (j) the total wages paid by the Company to employees in each quarter exceed the wages paid by the Company to employees in the Base Period by at least the amount promised in Section 3 above, AND (ii) the average number ofemployees who received pay from the Company during each of those eight (8) consecutive quarters* exceeds the average number of employees who received pay in the Base Period by at least the number promised in Section 3 above, AND (iii) all such employees worked in the Locality. Employment gains by the Company in the Locality that are offset by employment losses elsewhere in Virginia shall not be counted as employment hereunder, ‘The foregoing shall be based upon payroll tax filings made by, or on behalf of, the Company to the Virginia Employment Commission (now/formerly made on Form VEC FC-20 or facsimile thereof). If such tax filings include Company employees who did not work in the Locality, it shall be the duty of the Company to provide additional information sufficient to identify those employees who did work in the Locality. Employees of subsidiary companies, related entities, entities under common ownership or control, or employees of independent contractors hired by the Company shall not be counted as employees of the Company in fulfillment of its promise hereunder UNLESS such entities and their relationship to the Company are disclosed to and approved by the Commission in writing, AND such entities supply the Commission with the same employment documentation as described herein, Employees of temporary employment agencies (“temps”) who are assigned to work for the Company in the Locality shall not be counted UNLESS evidenced by letter from the temp agency selfing forth the number of man hours so assigned within the 36 months immediately following the Base Period. Such man hours shall be credited to the Company’s job-creation obligation at the rate of one job for one quarter for every 520 man hours evidenced by the letter. * the number of persons who received pay in any given quarter is calculated by adding together the number of persons who received pay in each month of the quarter and dividing that sum by three (3). Section 6. Determination of Performance ~ Capital Investment ‘The Company shall meet its capital investment obligations hereunder not later than thirty six (36) months after the end of the Base Period. The Company’s capital investment obligation shall be deemed to have been fully met when (1) the Grantee submits to the Commission a letter from the Commissioner of Revenue for the Locality attesting to: (@) the highest assessed value of all real property that was acquired or leased by the Company during the thirty six (36) months after the end of the Base Period and owned or leased without interruption from the date of said acquisition or lease until thirty six (36) months after the end of the Base Period, notwithstanding the Locality’s election, if any, to waive or refund taxes levied on such property, and (b) the original cost (not the depreciated value) of all personal property subject to taxation and acquired or leased by the Company during the 36 months after the end of the BasePeriod and owned or leased without interruption from the date of said acquisition or lease until 36 months after the end of the Base Period, notwithstanding the Locality’s election to waive or refund taxes levied on such property. In the event that the original cost is not known to the Commissioner of Revenue, the assessed value shall be reported in lieu thereof, and (2) the sum of items 1(a) and (b) above equals or exceeds the amount promised in Section 4, For purposes of this Agreement, leased assets are defined as those for which the Company is contractually obligated to pay the property taxes thereon during the term of the lease, and evidence of the Company’s obligation to pay such properly taxes is presented to the Commission. ‘The Company hereby expressly grants its consent for (a) the Commissioner of Revenue for the Locality to release to the Tobacco Commission or the Grantee records necessary to disclose’ the information required in Section 6 hererof, and (b) the Virginia Employment Commission to release to the Tobacco Commission all Company employment records of any kind held by the Virginia Employment Commission. Capital investments of subsidiary companies, related entities, entities under common ownership or control, shall not be counted as capital investments by the Company in fulfillment of its promise hereunder UNLESS such entities and their relationship to the Company are disclosed to and approved by the Commission in writing, AND such entities supply the ‘Commission with the same capital investment documentation as described in this Section. Section 7. Repayment Obligation In the event that the Company does not meet its obligations hereunder within thirty six (36) months after the end of the Base Period, it shall repay to the Grantee the unearned portion of the Grant, which is calculated as follows: A minimum capital investment of $1.0 iillion is required before any portion of the Grant is eared by the Company, hereinafter called the Minimum Investment Requirement. b. For purposes of repayment, fifty percent (50%) of the Grant is allocated for the Company’s capital investment obligation and fifly percent (50%) for its employment obligation. ©. After exceeding the Minimum Investment Requirement, the fraction of the Grant allocated to employment that is earned by the Company is determined by dividing the average number of employees receiving pay during the eight consecutive quarters as determined in Section 5 above with the highest employee count by the number of jobs promised in Section 3 notwithstanding the total wages paid by the employer. 4. After exceeding the Minimum Investment Requirement, the fraction of the Grant allocated to capital investment that is eared by the Company is determined by dividing the greatest value of assets attested to by the Commissioner of Revenue under Section 6 above by the capital investment promised in Section 4 above,e. All unearned portions of the Grant shall be repaid by the Company to the Grantee not later than thirty days after the date on which the Company is notified of the unearned amount, The Grantee agrees to remit the same to the Commission. Any refund owed by the Company to the Grantee hereunder shall immediately constitute an obligation of the Grantee to repay the Commission and such Grantee’s obligation shall not be contingent upon successful collection of any amount from the Company. The Grantee shall be liable for repayment to the Commission that portion of the Grant determined by the Commission to be due under the terms of this Section and hereby agrees to make such repayment without regard to whether Grantee has received repayment from the Company. £. Interest shall accrue on unpaid balances at the rate of 3% per annum beginning on the 31% day after the Company is notified of the amount due. g. Any monies due to the Locality pursuant to this agreement shall be considered to be owed to the Treasurer for the Locality and subject to the Treasurer’s statutory powers provided for in the Code of Virginia, h. If the Company docs not meet its employment obligations or capital investment obligations hercunder by the date which is 36 months after the end of the Base Period because of an “Event of Force Majeure” (as defined herein), the date by which a requirement to meet such commitments shall be extended day-for-day for a period equal to the time elapsed during the Event of Force Majeure. “Event of Force Majeure” means without limitation any of the following: acts of God; strikes, lockouts or other industrial disturbances; acts of public enemies; orders or any kind of the government of the United States of America or of the Commonwealth of Virginia or any of their respective departments, agencies, political subdivisions or officials, or any civil or military authority; insurrections; riots; epidemics; landslides; lightning; earthquakes; fires; hurricanes; tornadoes; storms; floods; washouts; draughts; arrests; restraint of government and people; civil disturbances; explosions; breakage or accident to machinery, transmission pipes or canals not caused by the Company; partial or entire failure of utilities; or any-other cause or event not reasonably within the control of the Company. Section 8, Events of Default If any of the following should occur within the thirty six (36) month period after the end of the Base Period, it shall constitute an event of default and the Commission may, at its election, accelerate the Company’s obligation to repay the portion of the Grant that has not been earned as. of the date of the event of default: a. the Company applies for or consents to the appointment of a receiver, trustee or liquidator of all or a substantial part of its assets, files a voluntary petition of bankruptey, makes a general assignment for the benefit of creditors, files a petition or an answer seeking reorganization or arrangement with creditors, or if an order, judgment or decree shall be entered by any court of competent jurisdiction, on the application of a creditor, adjudicating the Company as bankrupt or insolvent or approving a petition seeking reorganization of the‘Company or appointing a receiver, trustee or liquidator of the Company or of all or a substantial part of its assets which remains undismissed, undischarged or unstayed for a period of forty-five (45) days. b. the Company ceases to be of record and in good standing with the Virginia State Corporation Commission, and such failure is not cured within 60 days from notice thereof, unless Company obligations hereunder have been assumed by another entity and that assumption approved by the Commission and the Grantee. ¢. the Company fails, for reasons other than an Event of Force Majeure, to fulfill at least twenty five percent (25%) of either its employment obligation described in Section 3 above or its capital investment obligation described in Section 4 above within eighteen (18) months after the end of the Base Period. . Failure to provide verification to the Commission as described in Section 9, below, within 60 days from a written request from the Commission, Section 9. Verification of Performance If the Commission is unable to verify the Company’s progress towards meeting its capital investment and employment obligations herein using the information available pursuant to Sections 5 and 6, the Company shall provide, at the Company's expense, detailed verification to the Commission and the Grantee, of the Company's progress toward meeting its capital investment and employment obligations. Such verification shall be limited to the Company's payroll tax filings and property tax filings, together with such other supporting documentation about the payroll and property tax filings as the Commission may request, but any such request shall be no more often than annually If any of the capital investments described in Scetion 4 have been made on behalf of the Company by a lessor, the Company shall be responsible for gathering and reporting to the Commission information regarding the capital investment made by the lessor on behalf of the Company, Section 10. Acknowledgment and Notice ‘The Company and the Grantee each acknowledge and agree to its respective repayment obligation in accordance with Section 7 of this Agreement. Any notices required or permitted under this Agreement shall be given in writing, and shall be deemed to be received upon receipt or refusal after mailing of the same in the United States Mail by certified mail, postage fully pre- paid or by overnight courier (refusal shall mean retum of certified mail, undelivered) and addressed as follows: if to the Company, to:NAME: Norhurst, Inc. ADDRESS: QA ones reser _Onwuclkya 2ySu/ Real Estate Manager Fem NogtOa) — Attention: “Tee Nasxoal if to the Grantee, to: City of Danville 427 Patton Street Danville, VA 24543 Attention: Joseph C. King, City Manager if to the Commission, to: ‘Tobacco Indemnification and Community Revitalization Commission 701 East Franklin Street, Suite 501 Richmond, Virginia 23219 Attention: Neal E. Noyes, Executive Director This Agreement constitutes the entire agreement between the parties hereto and shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. The Company may not assign its rights or obligations under this Agreement without the prior written consent of the Grantee and the Commission; provided that the Company shall have the right, without the consent of the Grantee. or the Commission, to assign its rights (not its obligations) under this Agreement to any entity that controls, is controlled by, or is under common control with, the Company. This Agreement is made, and intended to be performed, in the Commonwealth and shall be construed and enforced by the laws of that state. Jurisdiction and venue for any litigation arising out of or involving this Agreement shall lie in the Circuit Court located nearest to the Locality and such litigation shall be brought only in such court, This Agreement may be executed in one or more counterparts, each of which shall be an original, and all of which together shall be one and the same instrument. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. If any provision of this Agreement is determined to be unenforceable, then the remaining provisions of this Agreement shall, in the sole discretion of the Commission, be voidable by the Commission or interpreted as in effect as if such unenforceable provisions were not included therein.The Company hereby warrants that from the date of this agreement until all obligations hereunder have been satisfied that it is, and will remain, registered and in good standing with the Virginia State Corporation Commission and that the Compaay is, and will remain, legally authorized to conduct business in the Commonwealth of Virginia The provisions of this Agreement are intended to and shall survive closing, the delivery of any deed or other instrument, and any other event, IN WITNESS WHEREOF, the parties hereto have executed this Agreement to become effective as of the date first written above. TOBACCO INDEMNIFICATION AND. COMMUNITY REVITALIZATION COMMISSION By: Executive Directpr Date:__ 4 / te} CITY OF DANVILLE prey — Date:_ Alte\ia. NORHI By: — (UI eh LW i — ites eszdgas B Date: S Sea 2012